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The Changing Face of Beauty Distribution

By: Ada Polla
Posted: February 29, 2012, from the March 2012 issue of GCI Magazine.

page 3 of 5

The new collection of fresh, contemporary, niche brands, which are not traditionally associated with department stores, along with our established beauty counters, provide Macy’s customers with a wide assortment of product to choose from for all of their beauty needs.” Indeed, this concept is gaining ground: From test runs in three Macy’s stores, the company now plans to include Impulse Beauty Supply Shops in 104 of its locations.

Another trend Kreitzman pointed to is the fact that retailers overall seem to be removing the risk of stocking independent brands by creating exclusive lines of their own: Sephora, Target and Walmart all have exclusive private label lines. So far, however, no department store has gone down that road.

Also adding to the panel discussion, ShopNBC’s Tarantino-Loyle pointed to the expansion of the direct selling channel and viability for global high-end brands. In fact, traditional department store brands such as Lancôme and Shiseido are available on ShopNBC, while Clarins and Murad are on QVC. Some beauty brands are even choosing to launch their products exclusively through the direct channel. For example, HSN had an exclusive on Lancôme’s Regenerie Eye Multiple Action product before it launched in other channels, and Carol's Daughter and Mary J. Blige successfully launched the singer's My Life fragrance exclusively on HSN.

Nontraditional Avenues, Online Sourcing

For the 2011 panel on beauty retail distribution, there was a more distinct focus on the nontraditional, non-bricks-and-mortar channels. In addition to Karen Doskow of Kline, the panel included Allen Burke, senior advisor for beauty, QVC; Paula Scandone, vice president, beauty, HauteLook; and David Olsen, vice president, business development, Dermstore.com.

Burke spoke of the importance of a demonstrable product and visible results as key success factors for the direct channel. He also insisted on the importance of brand founders and creators being the ones showcasing their products on TV, rather than paid celebrities or endorsers, and highlighted the synergy between the direct channel and traditional retail. Burke explained that a feature on QVC (and other TV shopping channels) typically has a halo effect on the brand’s bricks-and-mortar retail distribution locations, leading to a quantifiable increase in store sales for the few days following a product’s appearance.

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